Yesterday drugmaker Medarex (NASDAQ:MEDX) announced that it had entered into a collaboration agreement to develop compounds to treat cancer and other indications with Organon, a unit of Dutch conglomerate Akzo Nobel.

No financial details of the deal were disclosed, except that Medarex and Organon will share in any revenue that comes from drugs that make it to market through the deal. While this probably means that the deal is not doing anything directly positive for Medarex's balance sheet, these sorts of collaboration agreements will help Medarex speed up the pace of running the large number of compounds through its drug pipeline.

Some development-stage biotechs like Medarex and Rule Breakers pick Exelixis (NASDAQ:EXEL) are powerhouses when it comes to their research and drug discovery abilities. So despite not having any marketed products, Medarex has been able to sign development and licensing deals with big-name drugmakers like Bristol-Myers Squibb (NYSE:BMY) and Amgen (NASDAQ:AMGN).

We're beyond the go-go '90s where companies with sexy technologies like Millennium Pharmaceuticals (NASDAQ:MLNM) could have multibillion-dollar market capitalizations with few tangible products to monetize. The real test of Medarex's R&D capabilities is how well its compounds do in the clinic and if any of them can make it to market. So investors should pay attention to the study results that will be released at next month's American Society of Clinical Oncology medical conference. While Medarex may still be in the developing stages as a biopharma, it is proving the value of its biotechnology with the numerous research and development deals it has signed.

Millennium Pharmaceuticals and Exelixis are Motley Fool Rule Breakers recommendations. You can check out all our selections as well as get access to our message boards and exclusive content with a 30-day free trial to the newsletter.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.